In the context of finance and investment, a put option is a derivative contract where the buyer obtains the right to sell an underlying asset at an agreed-upon price (the strike price) before the contract's expiration date. This type of option can be used as a form of insurance for investors, allowing them to hedge against potential losses if the asset's price declines. The seller of the put option assumes the obligation to buy the asset at the strike price if the option is exercised by the buyer. Put options can be leveraged, allowing traders to gain a high level of exposure to an asset's price movement without having to purchase the asset outright.